Mindset

In the last analysis, the real reason for the decade-long delay in issuing the go-ahead for constructing the Bulacan airport was a certain bureaucratic mindset suspicious of yielding control over strategic projects to the private sector.

With the signing of the 50-year concession agreement, that stultifying mindset appears to be receding. That is promising. After all, the infrastructure backlog we accumulated is due to government’s traditional insistence that it alone should undertake the strategic projects our economy needs.

We have seen the benefits of privatization in many areas. Had government not privatized the North and South expressways, these vital road systems would have remained in the decrepit condition they were in the last years of government control. Had government not privatized the water concessions, Metro Manila would have remained waterless. Had government not opened the door to private investments, SCTEX and TIPLEX would not have been built.

Mega Manila would have been even more congested than it is now.

We knew for years that we needed a large and modern airport. But, for too long, bureaucratic mindset got in the way.

To be sure, San Miguel Corp. made government an offer very difficult to resist. The entire P735 billion airport will be built by the conglomerate at no cost to government. No government guarantee was required for financing the project. The proponent will even spend for all right-of-way acquisitions. SMC had already acquired the 2,500 hectares of land for the gateway. The corporation will build the rail line and elevated roads to the facility.

To top it all, SMC will give government 200 hectares for free. Government agencies could be moved out of the crowded city and relocated to an area with superior accessibility.

The construction of the new airport, to start before this year ends, will bring life to what had literally become a backwater area. The land San Miguel acquired was flooded most of the year. The salt beds and fishponds were made useless by severe pollution in the bay.

Among the first things San Miguel will do is to bring in Dutch consultants to design solutions to the flooding. The mangrove areas will be rehabilitated.

The backwater will become a hub of economic activity. Regional air services will use the new airport to bring in more flights to the city. It will be a center for aircraft maintenance and logistics services.

All the flurry of business activity this will generate will help sustain our economic expansion for decades.

Weir

If government can entrust something as complicated and highly technical as a regional air hub to a private company, why can’t it trust private investors to build what is needed to supply the metropolitan area with sufficient fresh water supplies?

When water distribution in the metropolitan area was privatized, the agreement envisioned that bulk water supplies would also be undertaken by the private sector. Instead, the old bureaucratic mindset crept in. Government agencies decided the way to go in building new raw water facilities was for government to borrow money and award construction to a company preferred by the lender.

And so it was that the New Centennial Water Supply Project, fixated on building a dam at the Kaliwa River that will submerge areas inhabited by indigenous people, would be funded by ODA. We sourced the loan from China and then awarded the project to China Energy Engineering Company.

Not all is well with this project, however.

The COA recently issued an Audit Observation memorandum that raised red flags on the bidding process. It appears the two losing bidders were involved merely to satisfy the requirements of the Procurement Act. Therefore, no real competitive bidding happened.

Even worse, the COA finds that the project was awarded even if the winning bidder lacked sufficient documents required. This was, in the COA’s view a negotiated procurement thinly disguised as a competitive bidding.

The COA findings could prove fatal to this bulk water supply project the metropolitan area so direly needs. It might not be too late, however, to reimagine the project and rethink the engineering and financing approaches to getting it done.

As early as 2009, the Osaka-based Global Utility Development Corp. (GUDC) proposed a $410-million weir project on a 25-year build-operate-transfer scheme. This could be built much more quickly than a full-scale dam without having to resort to borrowing.

The proposed Kaliwa Intake Weir will be just 7 meters high with a 16-kilometer tunnel that can deliver 550 million liters a day. That is enough to supply the city’s foreseeable needs. The tunnel will be 3.3 meter high and can be built very quickly.

It is never too late to drastically rethink this project. After all, the plan to build a large dam on Kaliwa River has not yet been granted an environmental compliance certificate. The local government of Infanta, Quezon is determined to block the dam – given the massive loss of cropland, rangeland and forest cover that the dam design will cause.

Contrary to the MWSS’ claims, the approvals given by the Quezon provincial government and by the Calabarzon regional development council are not sufficient. The Local Government Code requires the approval of the local government legislative council for projects that inflict substantial environmental costs.

And then there are the issues related to loss of ancestral domain. The design for a full-scale dam puts indigenous communities at risk of being submerged or being cut off.

It might do well for our officials to go back to the drawing board given the issues raised.